The proposed bill introduces a new chapter, CHAPTER 73, titled "Wealth Proceeds Tax," to Title 44 of the General Laws concerning taxation. This chapter establishes a tax of four percent (4%) on the lesser of an individual's, estate's, or trust's wealth proceeds or their federal modified adjusted gross income, minus a defined threshold amount. The bill provides specific definitions related to federal tax codes, including "wealth proceeds," which refers to net investment income as defined in the Internal Revenue Code, with certain adjustments. These adjustments include exclusions and inclusions of various types of income, such as interest on U.S. obligations, capital gains, and income from state and local government obligations.

The tax calculation differs for residents and non-residents of Rhode Island, with specific provisions for estates and trusts. All references to the Internal Revenue Code in this section will refer to the code in effect as of January 1, 2026.

The act is set to take effect on January 1, 2027, and explicitly states that it will not be applied retroactively. It aims to target high-income households, estates, and trusts by taxing their net investment income in accordance with federal guidelines.